Detroit Free Press Business Writer

Ford’s board of directors today approved a $1.8-billion repurchase of 116 million shares of common stock.

While buybacks are often seen as a way to boost the share price without raising the dividend, this is a more routine act. Ford buys back stock occasionally to offset the dilutive effect of new restricted stock issued annually to top management as part of their compensation.

The buyback also offsets the expected conversion of Ford’s 4.25% notes that are due Nov. 15, 2016. Some of those notes are expected to be converted to stock this year.

The combined share repurchases will reduce diluted shares by about 3%, the company announced today. The stock will be bought in the open market over the next year.

“These actions are consistent with our overall capital strategy to take anti-dilutive actions and position ourselves to further reduce debt,” Bob Shanks, chief financial officer, said in a statement. “The strength of our cash generation gives us confidence to take these actions to enhance shareholder returns.”

Ford earned $989 million in the first quarter, and it had $1.2 billion of cash flow from operations. The company’s cash reserve was $25.2 billion at the end of March, while debt totaled $9.5 billion.

Holders of the 3.9 billion shares of outstanding common stock are invited to attend, but only a few do. The Ford family also holds almost 70.9 million shares of Class B stock that gives them 40% voting control over the company.

Among proposals on the shareholder meeting agenda is a call for all shares to be treated equally and end the enhanced voting status of the Class B shares.

A slate of 16 directors is up for election, including newcomers James Hackett and John Lechleiter who joined the board in September.